There’s NO point earning over £50k?!

[ThisReallyDoesntAddUp]

Because of the £50k child benefit limit and 40% tax rate!

So I earn £78,000 pro rata overall now with my job following a mid year pay rise. This includes bonus and car allowance. I work 4 days a week (80% equivalent) which brings the overall pay this year down to just shy of £50k with a £9.6k bonus.

Out of the £9.6K bonus due in March, I’ve worked out 40% will go to the taxman, over £2K will need paying back for child benefit as I’m now over the £50k threshold, and a further £800ish will go towards my student loan. Deductions of just under £6k!!! This means I’ll only take home 30% of my bonus?!

I’m now on mat leave for baby number 3. AIBU to make sure when I go back I remain under the £50k mark by reducing hours even further?! I’d then have less to pay in childcare mitigating the difference in the pay I’d receive working an extra day each week.

Its an absolute joke, I was hoping to go back to work after my last baby and push on hard with my career but what is the actual point!! I may as well work less hours, keep the child benefit and pay less in childcare!

Very well said.

😂😂

Nope, you're conflating whether someone provides services with whether they're a net contributor. They're not at all the same thing. If a person is eg a care worker with 4 DC, they're not likely to be a net contributor but that doesn't mean they aren't providing services that would be missed by someone if they chose to reduce their hours.

I hate this glib idea that anyone who is a high earner works super hard and we're all capable of getting there if we just put the effort in, and that high earners contribute more and take less out.

That is fundamentally the Tory position to justify keeping wealth and not distributing it more equally.

Plenty of people earning minimum wage or just low earnings work very hard for it. Many of them are highly educated. However, even if they're not we need bin men, posties, hospital porters, admin, teaching assistants, charity workers etc. I don't want people doing those important jobs to be living in poverty.

The system is not always fair but you can't keep giving people benefits when they're earning more than double the average. Taxation needs an overhaul, and our childcare is ludicrously expensive in this country. Let's hope we get this after the election.

They definitely need to do something about single parents. We are massively disadvantaged, not only in child benefit.

But these threads and the ones about private schools always keenly show inequality on Mumsnet. It's like another world when I read what some mnetters think is normal and they're entitled to. Life isn't fair. But we could try and make it fairer. People complaining when their joint household income is 70k+ have no idea.

Don't panic @VampireWeekday- I think you've misunderstood how the 50k 'cliff edge' works.

It isn't that income tax doubles on your whole salary. We already do tax in bands: you pay the tax at that band level only for the parts of your income that falls in that band.

If you earn £52k, you still pay nothing on your first £12,570, then you pay 20% on the next £37,700 income, and then you pay 40% on income above that (above £50,271).

So on £49k income you get £38k take home pay and at £51k you get £39,383 take home pay.

The reason people call it a cliff edge is that child benefit tapers off. You pay back 1% of your child benefit for each £100 you earn over £50k. And that means that the marginal rate of tax - which is the percentage tax you pay on the last £1 you earn - gets really high. You're still going to end up better off, but just not by as much as you would expect. If you add in extra student loan repayments, you can reach the point where for every £100 extra you earn, you're only £30 better off. That's 70% marginal tax... but of course over your whole income you're paying a much lower percentage (because most of your income is taxed at 20%, and some no tax at all).

BUT, if getting that extra £100 pre-tax income costs you anything (extra childcare, extra commuting) then you may be worse off (since you only get £30 of it). If you have to work extra hours for it, you might decide you're not enough better off to make up for having less time with your family.

So don't panic - you're unlikely to end up significantly worse off next year because of your jobs overlapping. You might just not get to keep as much of the extra as you expected.

If you say what your earnings are in each job, when you get them, and what it's meant for you in terms of extra costs someone on here can help you figure out what it means for you.

And well done for getting the full time job!

I think the tone of your message came across that way but fair enough if you weren’t - you see it on here all the time, it’s like people prefer it if somebody isn’t in a high paid job and they are on benefits!

Anyway, the point of the post wasn’t that she didn’t want to earn over £50k at all, it was that she is almost penalised in other ways for doing so in the forms of taxes and childcare etc which is absolutely true.

Additionally, the poster's comparison to an NMW job was silly, because that's clearly not one of the options OP is picking from. She's talking about whether there's any point her working 4 days a week instead of reducing her hours a bit more.

It's not too late to pay £5k into your pension before April 5th.

You aren’t being unreasonable.

You’ll get lots of “my heart bleeds” type comments though, these are from people who would clearly be happy to do £25ks work and give it all to the tax man 🙄

It's true that there isn't a great relationship between hard work / merit / value to society and income.

But that doesn't alter the reality that it is dysfunctional and perverse to disincentivise anyone, in any income bracket, from doing productive work.

A cleaner on minimum wage gains nothing by a professional on a higher wage choosing to work less, earn less and pay less tax because of poor incentives created by a perverse system of benefits and tax. In fact, everybody loses.

And the (majority of) the political elite are not in this game "on the same team" as high earners. Their wealth is created from assets and investments, which are minimally taxed, and produce nothing for society (and in fact may be hugely damaging to society).

High earners who vote Tory are just as misled as low earners who vote Tory. They are not the party for people who earn their income through productive work. People who work for a living, however much they earn, should consider themselves on the same team Vs the asset-owning class who do not rely on productive work for their income.

I didn't realise there were private A&E departments for life threatening emergencies and you get to them by ringing private emergency services. Are the sirens and flashing lights the same when you earn more or is it a classier sound?

Besides which plenty of high earners do still use public services. Our household income is circa 180k and we don't do private medical care or private education.

I don't believe that you give everything over. 50k to the tax man

I dont believe your take home is the same as someone earning a penny less than 50K even taking into account child benefit

That's just hyperbole

So you earn more when you get a higher salary but if you don't think it's worth it go get a lower paid job

Exactly. And taxation is what runs the country. My bonus took me into that bracket so I lost 52% of it to tax and NI. But I still kept 48% of it!
You can't please some people.

It's even more irritating to work just as hard and earn nowhere near that level.

Exactly! Granted it doesn’t make any sense that to earn just a little bit over £50k (not sure exactly
on the figures) would make you worse off
financially than if you earned a little bit under but such if life i guess.

Some posters just can’t bear the thought that someone on a better salary may still have real,
validated concerns like everyone else 🤷‍♀️

@KidsDr You make a very good point and I agree, taxation needs to change. I know what you mean about disincentives. I just find some comments here galling. I hate the "I earn 70/80/100k because I work harder and I'm cleverer" attitude and that others could do the same if only they were less lazy. That's just untrue.

Yes, so much of the discussion on any of the perverse incentives boils down to posters saying those people should just work anyway and not consider what they get out of it, because I want them to. It's precisely the same on threads where people are horrified that UC recipients don't work more for the sake of working rather than for any tangible benefit. It's absolutely idiotic.

I can see that the OP feels penalised for crossing the threshold. My issue was with the idea that there was “no point”. OP has a couple of options and each of these have pros and cons. Only the OP can decide which option suits them best based on their circumstances and priorities. They can reduce hours and enjoy more family time, or they can stay as they are and have a greater chance of career development, more pension etc. The key thing is that OP has options. They can choose what to do, because there are positives and negatives to either option. So there is a point.

I’ve no objections whatsoever to OP earning at that level, or any other, working more, or less. Yes the system is long overdue a complete overhaul, yes it is frustrating that part-time working can ruin career prospects, yes childcare is a substantial expense which puts pressure on families. But as crap and unfair as the system is, you’re still better off being a middle earner than a low one, even if only for the luxury of having options.

There is a 2 child limit so it wouldn't make any difference.

Although not for child benefit. Which acts as even more of a disincentive to work for OP.

Child benefit is included in benefit caps so they do penalise having lots of kids and not working.

I get where you are coming from OP. It's also daft that you could have a household income of 2 x £49,999 with both working and this is not going to impact child benefit but having one person working and earning over £50k does.

Some people are bashing you on here for complaining but can understand where you are coming from. I am earning around a similar level but I opted into a salary sacrifice scheme for a company car so it brings me back down to £50k. Before that I put extra into pension. It’s all very well people making statements like “my heart bleeds” but it is annoying when you work hard over the years but each small incremental pay rise seems be worth less and less.

It’s a big jump in tax when you get into 40% territory and it’s hasn’t increased in line with inflation so more and more people are falling into this bracket purely because of incremental pay rises (which are not even in line with inflation) and paying more tax as a result.

You can predict this thread. Women tearing down women for being successful and daring to earn slightly over the average wage. Privilege 🤣

If people were less bitter (it’s the same ones) and the spent less of their time on their arses on mumsnet. They maybe more productive to society. Instead of spending day in day out being bitter and angry at other women for earning slightly above average.

The problems with this country; all in one thread.